This Is the Department Store Americans Are Most Loyal To

T.J. Maxx is not the best-known American retailer, a crown that probably goes to Walmart. However, it is the one that American consumers trust the most, according to a new survey. That could be one reason its business is doing better than that of almost any other retail chain in America.

Consultancy Brand Keys released its study of the most trusted retail brands, broken into several categories, which included both online stores and traditional retailers. The study shows that the difference between brands with high trust ratings and low ones creates large financial and operating results swings. The three primary pieces of evidence of this from the Brand Keys study:

It costs nine to 11 times more to recruit a new customer than to keep an existing one.

An increase in loyalty of only 7% can lift lifetime profits per customer by as much as 85%.

Depending on the sector, an increase in loyalty of just 3% is equivalent to a 10% across-the-board cost reduction program.

T.J. Maxx’s parent, TJX Companies, recently has been among the healthiest retailers financially. While dozens of other retailers are closing stores and going bankrupt, TJX continues to post an increase in profits and revenue. In its most recent quarter, revenue rose from $8.8 billion to $9.8 billion. Profits rose from $641 million to $762 million. Just as impressive, among the 1,261 T.J. Maxx locations, same-store sales surged 9% in the quarter compared to the same period of last year. Many of America’s largest retailers are posting declines in same-store sales. In its most recently reported quarter, J.C. Penney saw this number fall 3.5%.

Among observers who think they can point to the secret of the T.J. Maxx success, Jaime Katz, an analyst at financial research firm Morningstar, said, “TJX’s ability to continue to refresh its merchandise means they can attract the same customers quarter after quarter, year after year. They appeal to higher-end-income people who are looking for high-end brands but at better prices.”

The second company on the department store loyalty list was Marshall’s, also owned by TJX. Nordstrom was third on the list, followed by Dillard’s, Macy’s and Kohl’s. Not surprisingly, at the bottom of the list were J.C. Penney and Sears. Sears Holding, the parent of Sears and Kmart, has gone bankrupt and may liquidate completely. Many financial experts believe that J.C. Penney will not last much longer either. When it created the rankings, Brand Keys put big-box retailers like Walmart into a separate category labeled “discount retailers.”

Brand Keys cast a wide net to do its research. The company says that the brand loyalty study, which included department stores, was the result of questions put to 51,673 consumers, 16 to 65 years of age, from the nine U.S. Census regions, in self-selected categories in which they are consumers and for brands for which they are customers. While 45% were interviewed by phone, another 45% were interviewed face to face (to include cell-phone-only households) and 10% were interviewed online.